Overnight, President Trump poured even more cold water over a US dollar which is now suffering its worst across the board foreign exchange depreciation in years. In typical fashion, the President took to twitter to announce that he thought that the upcoming November election date should be altered, as he believes the use of postal votes is susceptible to tampering – with millions of Americans expected to stay away from in-person polling due to Coronavirus fears. Sadly, for the dollar and stock markets, it was a bridge too far from the tweet-happy President, as although he has no constitutional power to amend the election date; the real worry lies in the belief that he wishes to do so simply as the polls are so heavily against him, laying the foundations for him to dispute a loss should one befall him in November.
Despite Republicans desperately making statements to counter their President, the real fear for dollar markets lies within the notion that should Mr Trump lose in November, he will dispute the loss. During his 2016 run, he made off-hand comments speculating he would do the same if he lost, which at the time drew universal condemnation from Democrats and Republicans alike. Essentially, aside from being a cornerstone of stable, democratic rule – disputed elections play havoc with stock and foreign exchange markets, as uncertainty at a national level does not breed confidence economically speaking. Back in 2000, many will remember the tightly contested Florida recount between Gore and Bush, with the winner taking the presidency; during the multiple recounts and Gore legal challenge, the markets slipped by some 700+ points in the interim. If Trump is already laying the groundwork for a possible series of legal challenges across multiple swing states, some of which he carried by a minuscule margin in 2016, coupled with the already COVID battered economy; the end of the road for Dollar woes could still be some way off.
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Author: Joshua Haden-Jones, Senior Relationship Manager
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